Tuesday, December 21, 2010

Happy Holidays And Don’t Forget to Hang Up The Phone

The fourth largest pharmaceutical company in the world laid off more than 1,000 employees BY CONFERENCE CALL a few days after Thanksgiving.

I’ve been covering lay-offs and downsizing for 35-years and helping companies plan and execute big and small lay-offs for nearly 20-years. I have NEVER heard of a lay-off by conference call.

It’s bad enough that companies, encouraged by their accountants and CFOs, feel compelled to fire people just before Christmas. That’s insane in my opinion. But to do it on the telephone!?!?

Sanofi-Aventis, maker of Plavix, Ambien and Allegra, among other products, showed no sign of concern for its remaining employees, let alone the employees they didn’t need any more. They laid off 750 employees Thanksgiving 2009, more around Thanksgiving 2008, more last Christmas and a number of employees were shown the door July 4th weekend a year ago.

The CEO of Sanofi Aventis, Gregory Irace, issued a cold, hard statement this November, “Given the serious challenges facing our organization and the healthcare industry, it is important to act decisively now so that our organization has greater stability moving forward and that our resources are allocated to our strategic growth priorities.” Obviously, Mr. Irace’s priorities do not include his employees, even the ones who were notified by conference call, also, that their jobs were safe for the time being.

When we work with clients to plan and prepare for a significant lay-off, we always plead with them to have grief counselors available, both for those getting laid-off, but even more importantly, for those who will keep their jobs, while their friends and co-workers are on their way out.

There is a terrible feeling of guilt for those who remain. They feel bad that they still have a job while their co-workers don’t. Then anger strikes. The remaining employees are faced with having to work harder to make up for the workers that are no longer there to help. Guilt and anger are two very powerful forces working to undermine productivity. And a decline in productivity means an increase in costs and a decrease in profits.

A company spokesperson argued there was no other way to “quickly and consistently” notify hundreds of American employees that their jobs were being eliminated. Shel Holtz’s podcast on the “conference call lay-offs” put it simply, “The truth is they were too lazy to come up with another way,” he said.

Lazy is probably more forgivable than the cold-heartedness that drove the decision.

There are a number of cost-effective and coordinated lay-off scenarios. All of them allow a company to treat its employees with dignity and compassion. They require a little planning and preparation, but that pays off in the long-run.

What happens if business rebounds and you need to hire some of those workers back? What if business improves and your remaining employees find places to work where they will be treated better and bail on you?

This makes Scrooge seem like a nice old man.

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